4.
What are trying to inspire?
International health and benefits solutions can be critical to
financial efficiency, employee retention and cross-border
mobility. Solutions are maturing and this session explores
developments which are increasingly in the domain of the
risk manager.
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5.
What do we mean by
Employee Benefits?
Health and benefits programmes are all solutions, whether
implying risk transfer or not, implemented by employers, in
addition to mandatory public provisions, to protect their staff
from the consequences of the following risks:
• Longevity: or outliving your accumulated retirement assets
• Death: in the form of lump sum or annuities
• Loss of income: temporary, permanent / total, partial /
physical, economic
• Medical expenses: in-patient / outpatient
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8.
What are the issues?
Regulation
• Employee Benefits are regulated in many markets
• Can be mandatory
Financial Impact
• Cost of EB programmes are high – Euros 500–1,000 per employee (ex US)
• Potential cost of liabilities can be higher than P&C risk
Reputational Risk
• A good EB programme can act as an attraction/retention tool for employees
• Can impact on reputation of organisation if things go wrong
Risk Strategy
• Programmes are often structured and placed without reference to organisational risk
strategy or approach
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18.
Consolidated programmes

Traditionally, there have been few options to achieve this in a truly coordinated way:
o Utilise multinational pooling networks
o Utilise pan-European risk policies (limited to risk benefits only and EU countries)
o Seek to implement local solutions with a single insurance provider in each country,
without coordination

Recently, we have seen a shift in insurer-thinking towards a more globally coordinated
approach, building on existing insurance solutions in country

The innovative elements are around:
o Single insurer
o Centralised account management across all countries
o Combination of EU and non-EU countries via local country plans and international
plans (small headcounts)
o Programme-level discounts / Free Cover Limits
o Risk-based fee structure based on tariff rates and experiential rates
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34.
Client situation
Case Study 1
• Existing multinational pooling arrangements
• General strategy to consolidate vendors where possible but the pooling arrangements had not
achieved this as local providers still remain
• Not achieving economies of scale across their EB programme
• Headcount in a number of countries are small and aggregation was not occurring
• Needed a solution to consolidate vendors and, leveraging regional footprint
Approach
• Approached the multinational pooling providers with an initial RFI to establish if they were
interested in a ‘consolidated approach’
• Four selected to move forward into a full RFP
• Established a scoring structure and scored each response across criteria agreed with client
• Key to the scoring was the network’s ability to demonstrate a coordinated programme – NOT
traditional pooling
Result
• Preferred provider selected
• Undertook detailed financial analysis of the offers, the impact on local premiums and the
potential savings.
• Key aspects were centralised coordination across all policies, programme level terms and
conditions and programme level pricing, taking into account group experience
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35.
Client Situation
Case Study 2
• DLA Piper - Largest law firm in the world. 750 partners outside USA
• Members Agreement required partners to put Life assurance in place but never fully complied with.
• Wished to ensure cover and satisfy moral obligations to survivors
• Wished to consolidate provision and implement a global Life programme for all partners (mandatory
cover) to ensure that terms of Member Agreement complied with
• Given relationships elsewhere, DLA wanted to work with Zurich
Approach
• Engaged with Zurich to investigate their ability and appetite for the programme
• Utilising an EB audit report, reviewed Partner provision across the countries in scope
• Given the diverse countries and the scattered populations, a fully compliant programme was not
possible and DLA accepted this.
• Designed a simple banding structure in terms of benefit levels, pinned to Partner Earnings
Result
• In conjunction with Zurich, we designed a global programme which met all of DLA’s requirements,
utilising both local and Zurich International plans
• The global benefit structure agreed is:
• Earnings up to GBP250k – cover of GBP500k
• Earnings between GBP250k and GBP1m – cover of GBP1m
• Earnings between GBP1m to GBP1.5m – cover of GBP1.5m
• Also allows for ‘grandfathering’ of benefit levels in certain countries
• Global rate per mille and premium level agreed, combining local premiums and rates
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37.
Conditions for success
Commitment
Willingness to
manage the “pool”
Close cooperation
between ALL parties
Communication
to subsidiaries
Patience and longterm perspective
Buy-in of local
responsibles
Clarity of targets
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